The Evolution of Public Sector Procurement Law in the UK

Over the last century, public sector procurement law in the UK has undergone profound changes – from relatively simple processes driven by necessity during wartime to the transparent, and efficient framework (hopefully!) to be seen following next month’s introduction of the Procurement Act 2023, the journey reflects the country’s evolving priorities in governance and accountability regarding the spending of the ‘public pound’.

Early 20th Century: Foundations of Public Procurement

In the early 1900s, public procurement in the UK was largely informal and reactive, driven by immediate needs rather than structured policies. World War I saw the government’s role in procuring goods and services expanded dramatically to support the war effort and even ringfence scarce resources needed for armaments during the war and recovery after the armistice. This period saw the first attempts at standardizing procurement practices, albeit with limited oversight or formal regulation.

The interwar years and World War II further solidified the importance of procurement as a government function. The wartime economy necessitated centralized purchasing and rationing, laying the groundwork for more coordinated procurement practices. The establishment of the Ministry of Supply underscored the need for efficiency and accountability in public spending.

Mid-20th Century: The Rise of Formalized Processes

The post-war period brought significant economic and social changes, including the creation of the welfare state and the delivery of major infrastructure projects, housing, and public services. The 1960s and 1970s saw the introduction of procurement policies aimed at ensuring fair competition and value for money, though these were still fragmented and lacked a cohesive framework.

The economic challenges of the 1970s, including inflation and fiscal austerity, highlighted the need for greater efficiency in public spending. By the late 20th century, the UK began aligning its procurement practices with international standards, reflecting the country’s growing participation in global trade and economic cooperation.

Late 20th Century: EU Influence and Modernization

From the 1980s onward, public procurement in the UK became more structured, influenced significantly during this period by the country’s membership in the European Economic Community (EEC), later the European Union (EU). EU directives introduced principles of transparency, non-discrimination, and equal treatment, which were codified in UK law through regulations like the Public Supply Contracts Regulations 1991 and the Public Works Contracts Regulations 1991.

The 2000s saw further modernization with the implementation of the Public Contracts Regulations 2006, which consolidated earlier directives and emphasized competitive tendering processes. The 2014 EU procurement directives introduced innovative approaches, such as competitive dialogue and the incorporation of social and environmental criteria, which were adopted in the UK through the Public Contracts Regulations 2015 and related legislation.

Post-Brexit Developments: A New Chapter

The 2016 Brexit referendum marked a significant turning point. While the UK retained EU-based procurement laws during a transitional period, the opportunity to reform the system to better suit domestic priorities was seized. The 2020 Green Paper, Transforming Public Procurement, laid the groundwork for a new approach centred around simplicity, transparency, and flexibility.

The Procurement Act 2023

The Procurement Act 2023, due to come into force in February 2025, represents the culmination of a century of evolution in public procurement. This legislation consolidates the existing patchwork of regulations into a single, cohesive framework, reducing complexity for contracting authorities and suppliers alike.

Key features of the Act include:

• Transparency and Open Data: The Act mandates greater use of digital platforms to publish contract opportunities and award notices. The introduction of a new Procurement Register ensures that stakeholders have real-time access to data, enhancing accountability.
• Simplified Procedures: The Act reduces the number of procurement procedures, allowing authorities to select the most appropriate approach for their needs. The Competitive Flexible Procedure is a notable innovation, offering more freedom to design procurement processes tailored to specific projects.
• Value for Money and Innovation: By embedding principles of public benefit and proportionality, the Act encourages contracting authorities to consider not only cost but also social and environmental outcomes. This aligns with the UK’s broader policy goals, including achieving net-zero carbon emissions.
• Supplier Engagement and Support: To foster competition, particularly among small and medium-sized enterprises (SMEs), the Act introduces measures to simplify bidding processes and reduce barriers to entry.

As the new Act comes into force, it heralds a new era for public procurement in the UK. By prioritizing simplicity, transparency, and innovation, the Act aims to create a system that benefits taxpayers, businesses, and communities alike. While complete objectivity and transparency can never be fully guaranteed within procurement exercises, the new Act should provide a further step in the right direction.aims to create a system that benefits taxpayers, businesses, and communities alike.